McWilliams v. Farm and City Mut. Ins. Ass'n of Iowa, 49066

• Decision Date: 15 January 1957
• Docket Number: No. 49066,49066
• Citation: 248 Iowa 233,80 N.W.2d 320
• Parties: E. V. McWILLIAMS, Plaintiff-Appellant, v. FARM AND CITY MUTUAL INSURANCE ASSOCIATION OF IOWA and Dale Dunahoo, Defendants-Appellees.
• Court: Iowa Supreme Court

Page 320

80 N.W.2d 320

248 Iowa 233

E. V. McWILLIAMS, Plaintiff-Appellant, v. FARM AND CITY MUTUAL INSURANCE ASSOCIATION OF IOWA and Dale Dunahoo, Defendants-Appellees.

No. 49066.

Supreme Court of Iowa.

Jan. 15, 1957.

Charles L. Elson, Leon, for appellant.

R. B. Hawkins, Leon, A. Dean Flanders, Des Moines, for appellee Farm and City Mutual Ins. Assn. of Iowa.

Robert W. Burdette, Leon, John B. Miller, Nevada, for appellee Dale Dunahoo.

HAYS, Justice.

Plaintiff's petition is in two counts. Count one prays for specific performance of written contract whereby defendant Dunahoo agreed to assign a fire insurance policy. Count two seeks judgment against defendant Farm and City Mutual Insurance Association of Iowa as an assignee for a loss covered by said policy. The trial court decreed assignment by Dunahoo of what interest he had in said policy and dismissed the petition as to the defendant Association. Plaintiff appeals.

In June, 1954 the Association issued a five year fire insurance policy on a dwelling owned and occupied by Dunahoo. It covered the interest of the insured in an amount of $2,000 on the building and $2,500 (later increased to $3,500) on the furnishings. It also provided 'Assignment of this policy shall not be valid except with the written consent of this Association.'

November 2, 1954, Dunahoo sold the property on contract to the plaintiff for $5,500, payable $500 down (which was paid), with the balance payable on or before March 1, 1955 when warranty deed and abstract of title were to be furnished; also, insurance in force was to be assigned pro-rata. November 9, 1954, plaintiff paid the balance due, received a warranty deed and placed it of record. Dunahoo continued to reside in the property.

December 3, 1954, fire destroyed the house and contents. Proof of loss was furnished the Association, which denied liability under the policy. After this suit was commenced, the Association paid Dunahoo $2,500 for loss of furnishings.

On the trial plaintiff testified that at the time of the contract and the deed, it was orally agreed that Dunahoo might remain in the building until he found a place to live but not beyond March 1, 1955.

It is plaintiff's contention that until March 1, 1955, or until Dunahoo vacated the premises, Dunahoo was the owner thereof with complete insurable interest. The Association and Dunahoo assert the sale was fully consummated with the full payment of the purchase price and the delivery of the deed. The trial court held the sale was completed November 9th and Dunahoo's only insurable interest was the right of occupancy until March 1, 1955.

I. Assigned errors one and two should be considered together. They are that the court erred in holding the contract was not executory at the time of the loss, and in holding Dunahoo's insurable interest was limited to the right of occupancy.

A contract of fire insurance is simply a contract of indemnity, personal between insured and insurer, and does not run with the property covered therein. Where the contract, as here, is limited to 'the interest of the insured in the property' it simply assures reimbursement for his actual loss not exceeding a stated sum. This 'insurable interest' means that whenever a person will suffer a loss by a destruction of the property he has an insurable interest therein. In Merrett v. Farmers' Ins. Co., 42 Iowa 11, 13, it is said, 'What is an insurable interest? An interest to the insurable, does not depend upon the title or ownership of property. It may be a special or limited interest, disconnected from title, lien or possession. If the holder of an interest in property will suffer loss by its destruction he may indemnify himself therefrom by a contract of insurance.' This may include a tenancy at will. Schaeffer v. Anchor Mut. Fire Ins. Co., 113 Iowa 652, 85 N.W. 985; 44 C.J.S., Insurance, § 188; Davis v. Bremer County Fire Ins. Ass'n, 154 Iowa 326, 134 N.W. 860.

There is no dispute in the record but that Dunahoo had a right to occupy until March 1, 1955. The claim of plaintiff that he had a greater right depends upon the force and effect of the transactions of November 2 and November 9, 1954. At the time the...